Google’s Android OS Becomes Far More Expensive, and a Lot Less Attractive

by Matt Klassen on May 4, 2010

Last week the mobile patent wars took an unexpected turn, as Microsoft emerged from the shadows to publicly claim that Google’s Android operating system infringed on their intellectual property, a move that may turn out to be a dagger to the heart of both the long term viability of Android and Google’s plans for world domination.

Since Google has been licensing its innovative Android OS for free, the news that HTC has struck a patent deal with Microsoft does little to directly affect the search engine giant, but when this deal, coupled with whatever sum HTC will most likely be forced to pay Apple in its ongoing patent litigation, makes the Android the most expensive free OS on the market, we could see more and more manufacturers looking for more cost effective alternatives. Hey, I hear HP has an innovative OS they might be looking to license.

With a few rough numbers and a loose piece of paper, it doesn’t take a mathematician to figure out that the Android is quickly becoming far too expensive to use for companies like HTC. Analysts estimate that, with this latest deal, HTC is most likely paying Microsoft somewhere between $20 and $40 per phone, with the cost of the ongoing litigation with Apple—not to mention any future licensing deal—estimated to cost HTC almost double that, which suggests that the real cost of the Android OS is somewhere in the neighborhood of $40-$80 dollars per phone, a figure that would make it by far the world’s most expensive OS.

With figures like this being bandied about, and Microsoft promising to pursue the same kind of patent licensing agreements with other manufacturers utilizing the Android OS, although Google still licenses the OS for free, this revolutionary operating system is becoming more and more expensive each day.

If this wasn’t enough, Google now has to swallow the embarrassment of their competitors receiving licensing money for their product, most likely making them reconsider the sense of licensing their innovative OS for free.

For HTC, despite the fact that the Taiwanese mobile manufacturer put a positive spin on this latest deal with Microsoft, it clearly has been a rough couple of months. Had HTC known that entering into business with Google would have brought the wrath of the mobile world down on their heads, I’m sure they would have reconsidered. The one positive, if one could even call it that, is that this agreement with Microsoft could go a long ways to settling HTC’s ongoing dispute with Apple.

Does all this spell the end for Android? Not any time soon, that’s for sure, since the public is clearly interested in powerful Android smartphones, but should we see consumer interest in those products dip—perhaps due to the impending price hike manufacturers will surely implement to cover these added costs—using Android will quickly cease to be cost effective for most mobile manufacturers, and that could spell disaster for Google’s open OS.

But in a mobile ecosystem so choked with patents that you can’t sneeze without paying someone a licensing fee, it really was just a matter of time before more of Google’s competitors got on board the patent litigation train, a move that will, at the very least, make the Android OS less appealing to any new manufacturers that may have been considering implementing Google’s mobile tech.